Equipment Leasing: Why Businesses Prefer Leasing Over Buying
Deciding on whether to buy or lease equipment can be quite a tough call to make as the pros and cons of each are not one-size fits all. Financial constraints have, however, forced many businesses to embraces equipment leasing having considered the following:-
It gives you more purchasing power as there is a wider range of items you can afford to lease
Besides, a business gets a chance to obtain high-end equipment that would have been unaffordable if they decided to buy. Obtaining such equipment can increase your company’s performance and consequently, a higher ROI. This is the most common reason why companies prefer equipment leasing over buying.
The business is relieved of repair and maintenance costs, which are the lessor’s responsibility
While this might not be needed for property leases, it comes in handy when machines and IT equipment are leased. Besides saving on costs, downtime due to equipment breakdowns is also reduced as they are repaired or replaced immediately. Further, it is the lessor’s responsibility to continually update your equipment, which ensures that you are constantly equipped with the latest industry trends.
Less money is required for a leasing plan as no huge amount of money is required; thus, it is possible to organize 100% financing option
Equipment leasing is the most viable option for businesses without large cash reserves.
Equipment leasing comes with tax benefits depending on which option you choose
In some cases, the leasing cost is treated as a deductible cost at the end of the financial year, which reduces your tax amounts. In the long run, a company saves a significant amount of money.
More and more businesses are embracing equipment leasing as a viable option for equipment acquisition. For an in-depth analysis of the implications, and benefits it will have on your business, contact Revap Group Capital.